It was one of the most popular Canto-pop concerts held at the Hung Hom Coliseum. The organisers had prepared a gift for every fan: under each of the 10,000 seats was a specially ordered reusable bag stuffed with a whistle, brochure, light stick and other souvenirs.

The performance was great and the fans took the mementos home. But they also scattered lots of bags across the venue, making Coliseum staff do the extra work of tossing them into trash bins.

That concert was held after the 2009 introduction of the plastic bag levy. The story is told by a plastic bag manufacturer to illustrate the enduring appeal of plastic bags.

Before the levy's introduction, that manufacturer had worried that the industry would be hurt by the 50-cent per bag charge at 3,000 registered supermarkets, pharmacies, department stores, convenience stores and other outlets.

But over the past 22 months, the manufacturer has found a silver lining in the measure: making reusable plastic bags is even more profitable than manufacturing conventional plastic shopping bags.

'On the one hand we had to scale down our production lines on plastic bags, but on the other we have just witnessed an astonishing growth of the environmental shopping-bag business,' said Eric Lau Chi-leung, vice-president of the Hong Kong Plastic Bag Manufacturer Association. 'We owe our thanks to the levy.'

Demand for reusable bags has grown two- to three-fold since the levy began. And because the more durable bags have a higher profit margin, their sales have more than offset the 90 per cent decline in demand for conventional plastic bags.

With the government looking to expand the plastic-bag levy to all retail stores - not just the 4 per cent under the current scheme - it is a good time to ask how well it has worked to date.

The answer is: it is a mixed bag.

In the stores hit by the levy, plastic bag use is down 80 per cent. Yet bag makers are making more profit than they expected.

However, more reusable bags are now turning up in landfills. And a lot more plastic is needed to make those reusable bags - which makes Lau feel guilty about the climb in profits.

'We don't really feel very good about it,' Lau said. 'As we know, a lot of resources have been unnecessarily wasted.'

Lau's association had opposed the levy. Most of its members run large-scale production facilities on the mainland. They had warned that the levy would lead to a proliferation of reusable bags and their misuse.

And that is just what had happened, he said.

'Ask yourself how many reusable bags you have at home. You will definitely be surprised, but the real headache is that you can't get away from them,' he said. 'The abuse has got wider: when you shop for a pair of high heels, you are given a reusable bag for the shoe box. But inside the box, each shoe is also wrapped separately in a reusable bag.'

Back in 2009, the association distributed publicity leaflets to expose what it called the truth about plastic bags. Reusable bags, it warned, could use up to 60 times more plastic than conventional bags and take far longer to decompose in a rubbish dump.

Official landfill surveys show these fears have some justification.

Last year Hongkongers threw away 17 million reusable bags in landfills - 7 million more than in 2009, before the levy. They also threw out more paper shopping bags (43 million, up from 28 million) and more trash bags (1.4 million, up from 1.1 million).

Opponents of the bag levy had warned that it would create 'displacement effects' - meaning that people would use more expensive paper shopping bags, reusable bags and rubbish-bin liners.

They also worried that the levy would have to be raised regularly to maintain its disincentive effect. Ireland did that in 2007, raising its levy to Euro22 (HK$240) from Euro15 per bag.

Environment officials played down those effects last week when they launched a three-month public consultation aimed at extending the levy to all 60,000 retail outlets. Instead, they hailed the levy's effectiveness in bringing about an 80 per cent reduction in plastic shopping bags in those stores where it applies.

Among the 4.4 billion plastic shopping bags thrown away last year, only 316 million were from supermarkets, convenience stores and pharmacies compared with 657 million in 2009.

'This shows people have now changed their behaviour and bring their own bags to the shops, to avoid abuses,' Edward Yau Tang-wah, secretary for the environment, said last week. But Yau was also aware that in retail outlets where this bring-your-own-bag culture does not apply, plastic bags ending up in landfills have risen by 7 per cent, to 4.29 billion from 4 billion.

According to landfill surveys, the dumping of plastic shopping bags issued by fashion and footwear shops rose last year by 53 per cent to 52 million. The disposal of bags from bakeries increased by 20 per cent to 316 million.

'That's why we are asking the public if we should extend the levy scheme ... to other retailers, too,' Yau said.

Major retail chains say they would welcome an extension. They have complained that the scheme has hurt their business, since it applies to only about 4 per cent of all retailers.

After the levy was imposed by the 2008 product eco-responsibility law, seven retailers looked at the levy's negative sides and decided to drop out. 'There was a real and immediate impact on our business, and we tried very hard to avoid the levy. So we don't want to be covered by its extension,' said a spokeswoman for Yu Kee, a retailer with over 50 branches specialising in discounted products.

By removing pharmacy products items from its shelves, Yu Kee disqualified itself from the levy. The existing law applies to retailers that sell food, medicine and pharmacy items simultaneously.

In the first months of the levy, major supermarket chains reported a decline in sales because shoppers bought fewer items to fit into their bags. Whether that drop in sales has persisted is a matter of debate.

Caroline Mak Shui-king, chairwoman of the Hong Kong Retail Management Association, said it was difficult to gauge the real impacts on retail business because improvements in the economic cycle might have already covered the loss.

'The negative impacts might have been neutralised. The retail sector - having been bombarded by major government policy each year like the minimum wage and food labelling law - is simply too exhausted to assess the levy's real impacts,' she said.

But Census and Statistics Department figures indicated that last year saw a 5.5 per cent growth of supermarket retail sales to HK$37 billion, year on year, while the growth in 2009 was 3.3 per cent to HK$35 billion.

Environmentalists, for their part, have voiced worries over how a full-scale bag levy can be enforced, given that more than 90 per cent of the 60,000 retail outlets are small-scale, single-outlet operations.

One of their concerns is that retailers can avoid the levy by manipulating their pricing strategy for customers who do not want to pay for a bag. 'They can always lower the price of their product beforehand to offset the 50-cent levy indirectly,' said Dr Man Chi-sum, chairman of the waste subcommittee.

No registered retailers are allowed to offer any rebates under the law. But the law apparently cannot control how retailers price their products.

Man doubts that many retailers would shift to paper bags, since they are more costly. But he supports setting up channels to collect unwanted reusable or plastic shopping bags.

Lau, the bag manufacturer, said stricter enforcement was not an answer to irresponsible retailers who simply give away plastic bags.

'The answer lies in education. Plastic bags are a daily necessity that we can't live without. A better solution to abuse is to teach consumers to use them wisely,' he said.

Mak agreed with the need for education, citing Hong Kong's experience in cleaning up the streets. 'The Litter Bug image created for that campaign was so successful that it has made adults feel guilty about littering in front of other people. This may shed some light on the fight against plastic bag abuse,' she said.

Dr Chung Shan-shan, a solid-waste specialist at Baptist University, said Hongkongers should take the opportunity offered by the levy scheme to reflect on how their consumption was driven by convenience.

'People are saying it is fair to use a bag to carry a lunch box, but why can't we just take our own lunch box or try as much as we can to avoid takeaway food?' she said.

80%

The decline in the use of plastic shopping bags at affected stores since the bag levy was introduced in 2009